SEOUL (Reuters) -South Korean battery maker LG Energy Solution (LGES) has signed a $4.3 billion contract to supply Tesla with lithium iron phosphate (LFP) batteries for energy storage systems, a person familiar with the matter said on Wednesday.
The batteries will be supplied from LGES’s U.S. factory, the person said on condition of anonymity because the details were not public.
LGES said earlier on Wednesday that it had signed a $4.3 billion contract to supply LFP batteries over three years globally, without identifying the customer.
The announcement by the company, whose major customers include Tesla and General Motors, did not say whether the LFP batteries would be used in vehicles or energy storage systems.
“In accordance with our agreement, we are unable to disclose the customer’s identity due to confidentiality obligations,” LGES told Reuters. Tesla did not immediately respond to a request for comment.
The deal comes amid a scramble by countries and companies globally to strike tariff agreements with Washington and after South Korea’s Samsung Electronics and Tesla this week announced a $16.5 billion chip supply deal.
The LFP battery contract lasts from August 2027 to July 2030.
LGES said it included an option to extend the deal period by up to seven years and to increase supply volumes depending on discussions with its customer.
LGES is one of the few U.S. producers of LFP batteries, a battery chemistry long dominated by Chinese rivals that have little presence in the U.S. market.
It started production of LFP batteries at its Michigan factory in May.
(Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Christopher Cushing and Jamie Freed)
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